On Friday, Asian shares nudged higher as US and China weigh fresh talks to resolve a bitter trade dispute and a sharp interest rate hike in crisis-hit Turkey supported global risk appetite.

Outside Japan, MSCI’s broadcast Index of Asia Pacific share was up 0.4% in early trade, following gains on wall street overnight.

Australian shares were up 0.5% while Japan’s Nikkei stock index gained 0.9%.

On Thursday, S&P 500 gained 0.53%, the Nasdaq composite added 0.75% and wall street, Dow Jones Industrial Average rose 0.75%.

By a news of a possible new round of talks between Washington and Beijing, shares around the world have been limiting, as the trade war between world two world’s largest economies look set to sharpen.

Chinese officials welcomed an invitation from Treasury Secretary Steven Mnuchin for new talks. But US President Donald Trump tempered market expectations, tweeting on Thursday that the US is “under no pressure to make a deal with China.”

Capital Economics analysts said in a note, “The news on Wednesday that US officials had invited China to restart trade talks suggests that the announcement of tariffs on $200bn of Chinese imports may be delayed. But we think the chance that fresh talks will defuse trade tensions is low”.

In May, Mnuchin had brokered a deal with China dispart days later by Trump.”As a result, he has little credibility with Chinese policymakers,” they said.

On Thursday, kept policy unchanged as expected and warned that risks from protectionism were gaining prominence due to uncertainty around the trade tensions was highlighted by the European Central Bank.

Turkey’s central bank helped to support sentiment in emerging markets, striking out in a rare show of independence to hike its benchmark interest rate by 625 basis points, to 24%. Currency crises both in Turkey and Argentina have stoked fears of contagion over the past several weeks, hammering emerging market assets from Indonesia to India to South Africa.

After rising as high as 6.01 to the dollar, the lira weakened slightly to 6.1340 in early Asian trade.

“While the move is encouraging, the CBT faces a challenging macroeconomic environment characterized by rising inflation amid a sharp deceleration in economic activity,” Citi analysts said in a note. “We continue to believe that the external adjustment that lies ahead is likely to be more challenging than the previous episodes.”

On Thursday, the yield on benchmark 10-year Treasury notes continued to flirt with the 3% level, rising to 2.9700 % compared with its US close of 2.964 %.

The two-year yield fell Thursday after data showed US consumer prices rose less than expected in August, and underlying inflation pressures also appeared to be slowing, suggesting the Federal Reserve’s pace of rate hikes could slow. The two-year yield, sensitive to expectations of higher Fed fund rates, touched 2.7524 % compared with a US close of 2.756%.

On Thursday, the euro was flat at $1.1688.ECB President Mario Draghi comments that focus on healthy domestic fundamentals, including rapid growth in employment and a rise in wages.

The pound traded at USD 1.3114. On Thursday, the Bank of England kept interest rates on hold and highlighted greater financial market concerns about Brexit, a month after raising borrowing costs for only the second time in more than a decade.

The dollar rose 0.08 % against the yen to 112.01.US crude was 0.4 % higher at USD 68.88 a barrel as Hurricane Florence approached the US east coast. Brent crude also up 0.4 %, to USD 78.48 per barrel. Gold moved higher, with spot gold gaining 0.16 % USD 1202.31 per ounce.

Get The Latest Stock Updates, Equity Tips, Share Market Tips, Stock Market Tips, Intraday Tips  @ Investelite Research

Leave a Reply